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Who Pays a Failed LLC's Debts?

In theory, if a limited-liability company cannot pay up, then landlords and other creditors cannot come after the owners' personal assets

My spouse and I owned an LLC that closed last October. We filed dissolution with the state. We had a five-year lease agreement that has two years left on it. Although the business is now closed, the landlord has sent us collections notices for partial payments through October '08 as well as the lease payment and utility bills for 2009. We can't pay, and now he's trying to garnish our wages. Are we personally liable for these debts although our business is dissolved? We cannot afford a lawyer. —L.P.N., Green Bay, Wis.

Generally speaking, if your limited-liability company (LLC) was properly formed and operated, you should be protected from personal liability for its debts. "That means that if the LLC cannot pay its creditors, including landlords, then those creditors cannot come after the personal possessions of the LLC owners," says Stephanie Rahlfs, an attorney and editor at legal site FindLaw.